Valve Corp., the famous game maker who brought the world the popular franchises Half Life, CounterStrike, Portal, Team Fortress, and Left 4 Dead, made waves last week when it posted a job listing seeking hardware developers to help it design first-party hardware. That led to fervent speculation -- was Valve designing a gaming console? Was it making a "brain controller"?

I. Valve, the Hyper-Google

A new report in The New York Times may answer some of those questions, as well as provide a bit of insight into Valve.

Founded by ex-Microsoft Corp. (MSFT) employees, Valve has no bosses, despite being incorporated. The company's employee manual, obtained by The New York Times reads, "We don’t have any management, and nobody ‘reports to’ anybody else."

Valve's free-form atmosphere puts even Google Inc.'s (GOOG) policy of giving employees 20 percent of their time to work on pet projects to shame. At Valve employees make their own way (supposedly) 100 percent of the time. The NYT describes:

New employees aren’t even told where to work in the company. Instead, they are expected to decide on their own where they can contribute most. Many desks at Valve are on wheels. After figuring out what they want to do, workers simply push their desks over to the group they want to join.

The Seattle-area company zealously retains its employees. Gabe Newell -- who The NYT says is "CEO" of the company, but only by empty formality -- comments, "I get freaked out any time one person leaves. It seems like a bug in the system."

II. Building Gaming Goggles

The report says that Valve has hired Jeri Ellsworth, a self-taught inventor and chip designer, whose early work includes circuits for pinball machines that Valve has in its headquarters’ lobby. To make her prototypes at Valve Ms. Ellsworth employs 3D printers, laser cutters, and other bleeding edge modular manufacturing tools. Comments Ms. Ellsworth, "At one point, I said a hardware lab could be very expensive, it could be like a million dollars. Gabe [Newell] said, 'That's it?'"

Ms. Ellsworth is working on a team led by Michael Abrash -- a former id Software veteran -- to produce augmented reality goggles, somewhat similar to the Android-powered "Google Goggles" (officially dubbed "Glass Explorers"). Wearing the Valve goggles, gamers will be transported into the world of the game.

A prototype of Valve's gaming goggles sits in their lab.
[Image Source: Stuart-Isett for The New York Times]

Valve is reportedly still ironing out how it wants to produce the designs -- but it already has working prototypes. According to Mr. Abrash, the goggles will likely first be employed in virtual reality gaming (where the entire scene is animated), then 3 to 5 years down the road will be upgraded to support augmented reality gaming (where game world objects are overlayed on real world settings).

There are both technical and social hurdles to the augmented reality gaming vision. For one thing, someone walking down the street playing Half Life might be a bit dangerous. And then there're technical challenges, like how to popular "glue" faux billboards onto real world buildings to enhance the fantasy.

Thus far all attempts to produce a virtual or augment reality console have failed for the most part. While some smartphone apps are now offering mild augmented reality, perhaps the most ambitious virtual or augment reality device was Nintendo Comp., Ltd.'s (TYO:7904) ill-fated "Virtual Boy", which TopTenzlists as the "#1 video game console flop of all time".

Virtual Boy, the most famous virtual reality console, was a massive commercial flop.
[Image Source: TopTenz]

III. Valve is Drifting Apart From Microsoft

Gabe Newell, in his interview preached radical anti-authoritarianism, saying he would rather dissolve the company than sell it. The report claims that Electronics Arts Inc. (EA) was keen to purchase Valve years ago for $1B USD. Valve rebuffed the offers, and according to the report is today worth $2.5B USD.

Valve has grown increasingly critical of Microsoft, and says its games play faster in Linux than Windows.

Gabe Newell strongly resents this approach from his former employer of 13 years (Mr. Newell was among the "Microsoft Millionaires" of the 1990s). In a comment to The NYT he stated, "We would say to Microsoft, we understand all these frustrations about the challenges to your business, but trying to copy Apple will accelerate, not slow, Microsoft’s decline.'"

Incidentally one thing not mentioned in the piece was what operating system the wearable goggles use. Given Valve's anti-Microsoft sentiments of late, it seems likely they're built on Linux. That hypothesis would make sense as Valve recently ported its source codes to also use the open graphics interface OpenGL, instead of just Microsoft's proprietary PC graphics API DirectX. The port allows Valve's software to run on Linux and Apple Mac computers. Valve claims that Left 4 Dead2 is running faster on Ubuntu 12.04 Linux (OpenGL 4.3) than on Windows 7 SP1 (DirectX 11).

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